This table shows how different oil price scenarios could affect the U.S. economy, specifically inflation, gasoline prices, consumer spending, and savings. The analysis comes from RBC Economics.

The key idea: higher oil prices → higher gas prices → higher inflation → pressure on consumer spending or savings.

1.Baseline Scenario: Oil at $62 per barrel

This is the original forecast.

- Inflation (CPI): 2.7% average

- Gas prices: No major change assumed

- Savings rate: 3.6%

This is the normal expected economic path before oil price shocks.

2️. Scenario: Oil rises to $75 per barrel

If oil increases moderately:

Gasoline prices

- Increase about 12.5%

Inflation

- Average CPI rises to 3.0%

- That’s +0.3 percentage points

Consumer impact

Consumers must adjust in one of two ways:

Option A — Keep spending the same

- Households spend $53 billion more overall

Option B — Maintain spending without using savings

- Savings rate drops 0.3 percentage points

- Falls from 3.6% → 3.3%

3️. Scenario: Oil rises to $100 per barrel

This is a large oil price shock.

Gasoline prices

- Increase about 36.4%

Inflation

- CPI rises to 3.4%

- That’s +0.7 percentage points

Consumer impact

Option A — Maintain spending:

- Consumers spend $150 billion more

Option B — Protect spending by using savings:

- Savings rate falls 0.7 percentage points

- Drops from 3.6% → 2.9%

Important assumption in the table

The analysis assumes:

Every $10 increase in oil (WTI) raises gasoline prices by 29 cents per gallon.

Main takeaway

Higher oil prices force households into a trade-off:

- Spend more money on fuel and goods, or

- Reduce savings, or

- Cut consumption

The bigger the oil price increase (from $62 → $100), the larger the hit to inflation, spending pressure, and savings